Classic Car Market: Is it the Right Time to Buy?
05.07.2020 by Adam F
If you have a passion for classic cars, you will know that driving them around can be a valuable experience all in itself. But you can only enjoy washing and waxing your prestigious car for so long before you want to take it for a spin. Can you see the cycle you might be in?
Well, the issue is for most classic and supercar owners, that you're scared of not getting as much value out of the car and be able to enjoy it at the same time. You sit at the breakfast table looking outside and parked on your driveway, which is a stack of cash but a work of art as well. So, what can you do about it? Or maybe you're a newcomer, looking to buy your first classic car?
David Beckham's Aston
It's almost summertime and more than likely you'll be yearning to enjoy a staycation. The weather so far has been much brighter than a classic English summer, great for cruising to your leisure destination in a convertible. And what better way, than a classic British car?
David Beckham is selling his gorgeous maroon Aston Martin AM V8 Volante. This Series 2 model is separate from the models which came after it due to several key differences. The quartz-halogen headlights are seated within the bodywork. The mesh grill is tidier and more subtle than the later models. The AM V8 models were only produced for a year or so, and have Bosch fuel injectors fitted instead of the carburettors system of cars gone by. A magnificent classic British roadster, with a good grunt and confident bellow from its V8 engine, is one of only 288 examples made—the cream leather interior compliments the exterior, just brash enough but not too boastful of its appearance.
It's currently on the market for £445,000, listed by Aston Martin Works. The famous footballer has owned the car for a decade and a half. He decided it would make a great companion for him in Spain when he was playing for Real Madrid. It's even caught the attention of the American Market, listed in the states for $550,000. Who knows, it might be seen on Jay Leno's Classic Car Show on YouTube, sometime soon.
The height of British beauty
When you look out into the world of motorsport, you may become a little melancholy at the fact that there aren't many British brand names bobbing about. In the modern era, McLaren is the standard-bearer for us Brits, but years and years ago, it was the sleek animal we know as the Jaguar. The 'Jaaag' as Jezza would call it, was the name to beat in the early days of Le Mans racing. The most iconic of all Jaguar models that took part in the early 24-hour gruelling race was the D-Type.
A breathtaking piece of moving art, the D-Type was beating every name under the sun in the 50s. It's earned a reputation of grace and pace, and one such model has fetched a staggering €6.4 million at a Paris auction.
Four-time Aussie driver's champion Bib Stillwell took delivery of Chassis No. XKD 520 in January of 1956, in Melbourne. It is impressive, the seventh D-Type ever to be produced for private customers. He then went on to drive the aerodynamically sleek car at the charmingly named Moomba Tourist Trophy, held in Albert Park in March of 1956. He finished second but raced in the same event the following spring and took a respectable third place.
Now the perfect time to buy?
As with every industry that has been affected by the lockdown, the classic car industry has taken a nosedive. Customers just aren't so ready to spend anymore, and they are cautious about what kind of classic cars would make the best investment. There's always been a balance of both strategies, but it seems like people aren't so keen on buying for pleasure, as they are for financial longevity. This is why some of the most beautiful classic cars have been sold for a fraction of what they could have gotten in a normal market.
At the Petitjean Collection auction, a 1963 Series I 3.8 fixed-head Jaguar E-type has sold for a damp and dim £60,000. Any other time it would have collected up to £100,000. A spirited yet gorgeous Lotus Elan Plus 2S 130 sold for just £10,370. A Mini Marco MkIV sold for only £4,283. Could this be a sign?
If you're a seasoned veteran or a newcomer to the classic car market, now might be the right time to get your feet wet. A 1968 Lamborghini Miura P400 sold for a sorrowful £586,147. However, when the lockdown is over, and the market has recovered, it's expected to make around £721,412. Who knows, the joyful energy of returning to the things we love, could get buyers in a generous mood and you could see this type of classic supercar achieve even higher.
To put things into perspective, a 1971 Alpine-Renault A110 1600S roadgoing version was sold for £153,300 when the guide price shows that it's worth at least £180,353 to £225,441. A rare 1967 Fiat Dino Coupe with a purring Ferrari 2.4-litre V6 engine, was sold for £32,463 when the guide price was screaming for it to be sold at £36,070 to £54,105. A sublime 1962 Maserati 3500 GT was sold for £103,702 when the guide price shows it should have been let go for no less than £117,229 and could have gotten as much as £135,264. As you can see, tens of thousands of pounds are being lost and although that is sad in a way, now is the right time to buy for car-flippers and collectors.
The supercar field
As with many industries, car auctions have had to be continued from home. Online auctioning has allowed customers to continue shopping and not have to curtail their spending habits as much due to the lockdown. RM Sotheby has picked up the flag and ran with it, in this regard and thanks to them, history was made.
A 2003 Ferrari Enzo has become the highest selling car in any online auction, of all time. The company completed sales totalling $16.4 million worth of vehicles, but the scarlet racehorse was sold for $2.64 million. Still a collector's car, the Enzo was perhaps the first mid-engined hypercar that Ferrari made. It showed just 1,250 miles on the clock and has only been owned by 2 previous owners. It comes with everything you would expect at that price; The original owner's manual, tools and tool bag, and yes, even the stickers on the window that were there when the car rolled off the production line.
Brand new in 2003, it cost $650,000, and if you adjusted for 17 years of inflation, you would still only get just under $1 million. But it has a special place in many people's hearts, it's just been sold to one of them for two and a half it's MSRP price; breaking a record in the process.
A traditional logbook loan is a good option as you can at least squeeze a little financial value out of the car. However, the average amount of money you will borrow is between £500 and £50,000. Which, when you think about it, for a classic or supercar, isn't that much. However, some firms may go higher, but that depends on what kind of car you have, how old it is, the condition it's in, the overall value in terms of longevity and depreciation, will all be taken into account first.
The major downside is, you are handing over ownership of your car until the loan is paid. In essence, you won't be able to drive the car whenever you wish, and you may lose other owner privileges such as needing permission to do repairs, drive it on the weekend and display it at car shows, etc. For many classic car and supercar owners, this is a tipping of the balance moment, and you'll only ever consider this if your car has been falling in market value or you are desperate for the cash. Effectively, you lose control of one of your assets for a lump sum, which still needs to be repaid.
A better alternative
Surely, there's a more sensible way of doing things? Well, if you are thinking this way, then you must have a foxhound's sniffer because you've stumbled upon a better alternative. Our logbook loan against your classic car is a vehicle equity release. You can get loans ranging between £5,000 and £250,000. This is a sum determined after we do a valuation of your car. We also provide an accurate market appraisal, so you don't just have to take our word for it. We trust our experts, but it's always good to be guided by what the average customer in the classic, prestigious, and supercar market thinks.
The good news is, you can still keep driving your car! Our lending rates are very competitive, making us a viable alternative to the traditional logbook loan. Before you consider chucking it all in and selling your car, don't hesitate to contact us and see what we can do for you. After you have been guaranteed a price if you can magically find a lower price from another specialist lender, rest assured we won't give up on you. We'll beat their price by 10%!
What's in store?
The Richoz Collection is set to be entering into the European sale by RM Sotheby. It's an online auction at Open Roads is set to commence this summer; on 14 July. This is an 8-car collection which has some of the most exquisite classic supercars.
The rare alloy-bodied Ferrari 275 GTB from 1966 is set to the showpiece. Bear in mind, a Ferrari 250 GTO from 1962 was sold for a staggering $48.4 million at an auction in 2018, so this might bring in some great interest from classic Ferrari lovers.
The late Edgar Richoz was a racing driver from Switzerland and collected some of the most amazing supercars and race cars of his day. A Ford Model A from 1931 is listed at an estimated 15,000 to 20,000 Euros. Then it gets a bit juicer with a 1976 Le Mans car, the Inaltera LM GTP which is expected to be worth between 450,000 to 550,000 Euros. Jean Rondeau, a French privateer designed it, and he finished fourth overall at the Le Mans 24-hour race in 1977.
The auction is truly a classic car lover's haven as you also get to bid on a 1964 Jaguar E-Type S1 which is estimated to be sold around 80,000 to 120,000 Euros. Another of the Ferrari GT era class, 1965 330 GT 2+2 is estimated to be worth about 120,000 to 150,000 Euros.
The grand finale will no doubt be by the incredible 275 GT, which is just one of 60 Ferraris built. It still has the factory fitted electric windows, and it retains all of its original interior. Right now, it's estimated to fetch around 1.7 to 1.9 million Euros!
The auction is going to take place from the 14th and will end on 21 July.
Due to the lockdown, the classic car market has suffered, but it has chugged along like everybody else. The ball is clearly in the buyer's courts, as the price of some real gems has gone down quite staggeringly. Now is the time for first-time buyers to get involved as there are some great alternatives to the traditional logbook loan option. You can still own the car you have bought, drive it around, and yet be given a lump sum in its equity. Auctions are still occurring, but they're just online. There's no reason you shouldn't start the ball rolling now.